In a letter from Marc Whitten The General Manager of Microsoft X Box Live that cane be found here.
http://www.xbox.com/en-US/support/live/serviceissue.htm
Microsoft has announced the will be for a limited time will be giving away free copies of the XBox Live Arcade game Undertow.
This is there way of apologizing for the extremely poor performance of Live over the holidays.
There is no mention of what happens if you have already paid for Undertow.
Once again Microsoft as a clear view of the problem and still fails to deal with it properly.
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